[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-113320-en":3,"doc-seo-113320-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},113320,687197207639,"Asher","https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd",8,"Research & Report","The Macroeconomy After Tariffs - Research Findings and Implications","What happens to domestic economic performance after tariff changes? This study estimates impulse response functions using local projections and a panel of annual data covering 151 countries from 1963 to 2014. Results link tariff increases to persistent and significant declines in output and productivity, alongside higher unemployment and inequality, real exchange rate appreciation, and no meaningful change in the trade balance. Effects intensify during expansions and under tariff rises imposed by more advanced or smaller economies, with larger impacts when tariffs increase than when they fall.","Pub lic Disclosure Authorized Pub lic Disclosure Authorized  \nThe World Bank Economic Review, 36(2), 2022, 361–381  \n[https://doi.org10.1093/wber/lhab016](https://doi.org10.1093/wber/lhab016)  \nArticle  \nThe Macroeconomy After Tariffs  \nDavide Furceri, Swarnali A. Hannan, Jonathan D. Ostry,  \nand Andrew K. Rose  \nAbstract  \nWhat does the macroeconomy look like in the aftermath of tariff changes? This study estimates impulse response functions from local projections using a panel of annual data that spans 151 countries from 1963 to 2014 . Tariff increases are associated with persistent, economically and statistically significant declines in domestic output and productivity, as well as higher unemployment and inequality, real exchange rate appreciation, and insignificant changes to the trade balance. Output and productivity impacts are magnified when tariffs rise during expansions and when they are imposed by more advanced or smaller (as opposed to developing or larger) economies; effects are asymmetric, being larger when tariffs go up than when they fall. While firmly establishing causality is always a challenge, the results are robust to a large number of perturbations to the baseline methodology, and they hold using both macroeconomic and industry-level data.  \nJEL classification: F13, O11  \nKeywords: tariffs, output, productivity, unemployment, inequality, exchange rate, trade balance  \n1. Introduction  \nPerhaps more than on any other issue, there is agreement among economists that international trade should be free.1 This foundational principle goes back at least to Adam Smith, and rests on the notion that—in the absence of distortions, externalities or other market failures—free and competitive markets do best in allocating resources to their most productive uses. In reality of course, the world is full of market imperfections, but tariffs seem poorly suited to addressing them in the many circumstances in which they  \nDavid Furceri is Deputy Division Chief at the IMF, Associate Professor at University of Palermo, and Senior Research Fellow at RCEA; his email address is [dfurceri@imf.org. Swarnali A. Hannan](dfurceri@imf.org. Swarnali A. Hannan) (corresponding author) is Senior Economist at the IMF; her email address is [sahmed@imf.org. Jonathan D. Ostry is Deputy Director](sahmed@imf.org. Jonathan D. Ostry is Deputy Director) in the IMF Research Department and Research Fellow at CEPR; his email address is [jostry@imf.org. Andrew K. Rose](jostry@imf.org. Andrew K. Rose) is Distinguished Professor and Dean at NUS-Business, Emeritus Professor at Berkeley-Haas, Senior Fellow at ABFER, and Research Associate at NBER; his email address [is bizaro@nus.edu.sg. Key output and the data](is bizaro@nus.edu.sg. Key output and the data) set are available at [http://faculty.haas.berkeley.edu/arose. The](http://faculty.haas.berkeley.edu/arose. The) authors  \nare grateful to Charles P. De Cell and Zhangrui Wang for excellent research assistance. They would like to thank Penny K. Goldberg, Nina Pavcnik, three anonymous referees, and numerous seminar and conference participants for comments and suggestions. This paper is part of a research project on macroeconomic policy in low-income countries supported by UK’s Department for International Development. The views expressed in this paper are those of the authors and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. A supplementary online appendix for this article can be found at The World Bank Economic Review website.  \n1 For example, see the survey on free trade in Initiative on Global Markets (University of Chicago Booth School of Business), [http://www.igmchicago.org/surveys/free-trade](http://www.igmchicago.org/surveys/free-trade).  \n© The Author(s) 2021 . Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK.  \nAll rights reserved. For permissions, please e-mail: [journals.perm","cbCainhOoyKduol0","https://ap.wps.com/l/cbCainhOoyKduol0","pdf",1382845,1,21,"English","en",105,"# Introduction\n## Tariffs and macroeconomic effects\n## Empirical approach and evidence\n## Transmission channels: output, productivity, labor markets, and inequality\n## Exchange rates and the trade balance\n## Heterogeneity and asymmetries","[{\"question\":\"How do tariff increases affect domestic output and productivity after the change?\",\"answer\":\"Tariff increases are associated with persistent, economically and statistically significant declines in domestic output and productivity.\"},{\"question\":\"What labor market and inequality effects are linked to tariff changes?\",\"answer\":\"Tariff increases raise unemployment and inequality, with the impacts persisting after the change.\"},{\"question\":\"Do tariff changes affect the trade balance and real exchange rate?\",\"answer\":\"Tariff changes lead to real exchange rate appreciation, while changes to the trade balance are statistically insignificant.\"}]",1784502562,53,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"the-macroeconomy-after-tariffs-research-findings-and-implications","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/the-macroeconomy-after-tariffs-research-findings-and-implications/113320/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-21","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"How do tariff increases affect domestic output and productivity after the change?","Question",{"text":75,"@type":76},"Tariff increases are associated with persistent, economically and statistically significant declines in domestic output and productivity.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"What labor market and inequality effects are linked to tariff changes?",{"text":80,"@type":76},"Tariff increases raise unemployment and inequality, with the impacts persisting after the change.",{"name":82,"@type":73,"acceptedAnswer":83},"Do tariff changes affect the trade balance and real exchange rate?",{"text":84,"@type":76},"Tariff changes lead to real exchange rate appreciation, while changes to the trade balance are statistically insignificant.","https://schema.org",{"og:url":51,"og:type":87,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":89,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":92},[93,97,101,105,110,115,120,123,128,131,135],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":94,"show_sort_weight":95,"slug":96},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":98,"show_sort_weight":99,"slug":100},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":102,"show_sort_weight":103,"slug":104},"Exam",70,"exam",{"id":106,"doc_module":4,"doc_module_name":45,"category_name":107,"show_sort_weight":108,"slug":109},5,"Comic",60,"comic",{"id":111,"doc_module":4,"doc_module_name":45,"category_name":112,"show_sort_weight":113,"slug":114},6,"Technology",50,"technology",{"id":116,"doc_module":4,"doc_module_name":45,"category_name":117,"show_sort_weight":118,"slug":119},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":121,"slug":122},30,"research-report",{"id":124,"doc_module":4,"doc_module_name":45,"category_name":125,"show_sort_weight":126,"slug":127},9,"Religion & Spirituality",20,"religion-spirituality",{"id":126,"doc_module":4,"doc_module_name":45,"category_name":129,"show_sort_weight":126,"slug":130},"World Cup","world-cup",{"id":132,"doc_module":4,"doc_module_name":45,"category_name":133,"show_sort_weight":132,"slug":134},10,"Lifestyle","lifestyle",{"id":136,"doc_module":4,"doc_module_name":45,"category_name":137,"show_sort_weight":106,"slug":138},19,"General","general"]